TLDR:
- Among the creators of the latest stablecoin USDG are prominent names in the crypto space such as Robinhood, Kraken, and Paxos.
- Operating out of Singapore, USDG ensures alignment with the local rules and regulatory environment.
- An impressive share, 97%, of the reserve earnings from USDG will be allocated to those actively participating in the network.
- Handled by the largest bank of Southeast Asia, DBS Bank takes charge of the cash and custody management for this initiative's reserves.
- While Tether and USDC currently dominate the stablecoin arena, USDG enters the market aiming to shift dynamics against these front-runners.
In a fresh move towards alternative digital dollars, a consortium of leading cryptocurrency companies has debuted a new stablecoin project as of November 4, 2024. The Global Dollar Network With high-profile entities such as Robinhood, Kraken, and Paxos involved, the launch of USDG presents a model that vows to share nearly all earnings with its network participants.
This venture is a collaborative effort with seven initial partners: Anchorage Digital, Bullish, Galaxy Digital, Kraken, Nuvei, Paxos, and Robinhood. Paxos, situated in Singapore, is the official issuer of the USDG token, operating under the regulatory framework soon to be revised by the Monetary Authority of Singapore.
[1/4] Meet the Global Dollar Network, a forward-thinking platform dedicated to boosting stablecoin usage globally, introduced by Global Dollar (USDG). Initial collaborators include @Anchorage , @Bullish , @galaxyhq , @krakenfx , @Nuvei , @Paxos & @RobinhoodApp .
💻: https://t.co/RwFa3PmihB pic.twitter.com/6p2pdmyhNv
— The official account of Global Dollar Network (@global_dollar) November 4, 2024
Paxos' CEO Charles Cascarilla has highlighted a significant shift with this project, promising about 97% of the project's profits will flow to its network's contributors. This deviates from the traditional stablecoin blueprint where issuers claim the bulk of interest from reserve funds.
DBS Bank, standing as the top asset-holder in Southeast Asia, has been chosen as the leading banking associate for this project, managing the cash flow and holding custody of USDG reserves focused primarily on U.S. Treasury securities.
With a novel rewards mechanism, the Global Dollar Network aspires to encourage more stablecoin integration by rewarding network participants. Unlike many crypto projects that concentrate rewards at the user level, USDG’s model directs rewards to businesses that enhance the network's connectivity and liquidity.
Participation in the network is open for new entrants, who can earn rewards based on diverse activities that contribute to network building. The system offers incentives for varied contributions fostering the ecosystem.
Through collaborators like Anchorage, with nationwide operations, the stablecoin will be accessible to users in the United States. This wide accessibility has the potential to significantly boost USDG's footprint in the American market.
USDG embarks on its journey in a heavily monopolized stablecoin market led by two main competitors. Tether’s USDT and Circle’s USDC Tether and USDC command nearly 90% of the stablecoin market's total capitalization today, as per CoinGecko's insights.
The launch coincides with a bustling phase in the crypto markets, highlighted by rising Bitcoin prices amidst predictions of easing U.S. interest rates and the introduction of new crypto exchange-traded products.
A governance panel composed of representatives from the alliances in the network manages decision-making for the project, ensuring shared governance.
Stablecoins essentially act as a vital link connecting traditional financial currencies with the crypto universe, offering a means to transition from one to another while sidestepping the often wild price fluctuations of cryptocurrencies.
Arriving at a time when the landscape around digital asset regulations in the U.S. is evolving, the USDG launch anticipates regulatory changes regardless of the upcoming election results.
Mirroring a common strategy among leading stablecoin issuers, the reserves for USDG will be backed by U.S. Treasuries to retain a stable value and yield generation.
In the mix of revolutionary changes in the stablecoin sector, the project incorporates yield-sharing models alongside protocol-level advancements as seen in initiatives like M^0.
This project stands as part of an expansive initiative aimed at fast-tracking global stablecoin claiming while ensuring fair economic returns to participating organizations contributing to network upkeep and growth.
